Glossary of Human Resources Management and Employee Benefit Terms
Employee rewards are gifts, incentives, praises, or prizes that an organization gives to its workforce from time to time to award their efforts and achievements. Not only do rewards drive positive reinforcement, but they also motivate employees to keep performing better.
Interestingly, employee rewards can either be intrinsic or extrinsic. While intrinsic rewards are non-tangible, extrinsic rewards are tangible.
An employee reward is just that tool organizations leverage to recognize top talent and reward them for achieving milestones, reaching goals, or a job well done. The primary reason organizations distribute rewards is to help attract, maintain, and retain high-performing employees.
When employees are rewarded for their achievements, they feel a sense of pride, ownership, and willingness to work as motivated as they were in the upcoming projects. Rewarding connects employees to the organization, enhances work performance, and increases their chances of staying.
Employee rewards are important because they help:
Employee rewards can be classified into 8 types, and these include:
Employee reward programs are a tool or a tactic that organizations use to acknowledge and appreciate employee performance in either intrinsic or extrinsic ways.
These programs can be at either individual or group levels and are designed to fulfill three essential purposes:
Motivate employees with rewards of their choice. Delight employees with rewards for every milestone and achievement.
A well-designed employee rewards program can create a positive atmosphere where people feel valued and appreciated. It builds loyalty, drives positive behaviors, and encourages employees to perform better.
Here’s a step-by-step process to creating an employee rewards program:
Rewarding employees for their excellent performance is vital for retention and keeping their motivation levels high. When employees' efforts are rewarded, they are more likely to become productive and loyal.
The idea is to celebrate employees for their hard work, accomplishments, or well-done job. Know that not all employee rewards are crafted to be the same — it's more about focusing on making the appreciation meaningful and impactful.
Here are some quick ideas to reward employee performance:
Yes, they do. In fact, recognizing and rewarding employees is a crucial part of an HR toolkit. Do you know why? It’s because even the most talented teams can falter, and even the most motivated employees can turn disenfranchised.
This is where employee rewards programs play an invaluable role in getting the most out of your workforce. They are expensive to implement and cause less disruption to your business operations.
Once implemented, employee reward programs have the power to generate a myriad of benefits, which include:
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.
An employee reward system refers to a program that a company or an organization sets up to acknowledge and reward top-performing employees, either intrinsically or extrinsically.